Book Profit

Book profit is a term that is used in the financial world to indicate profits demonstrated on paper, but is not actually real. For example, if you purchase a stock and the value of the stock goes up, you have made a book profit. If you sell the stock, your paper profit will turn into real profit. Businesses mostly use book profit to show a good performance to their investors. But, it is also important to use the information carefully as the profit has not actually taken place and it might vanish if the market faces any changes suddenly. Book profit is also termed as paper profit by some people to indicate that the profit has not actually occurred. New investors who are researching the stock market may be misguided by such profits. There may be a sudden downturn in the market after a book profit which might take back the investor right to the position from where he started.

Ads by Google

Edited and Updated 31st May 2014

You can leave a response, or trackback from your own site.

Leave a Reply

You must be logged in to post a comment.

Powered by WordPress